Voya Retirement Insurance and Annuity Company et al.;, 22245-22249 [2015-09067]
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Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Notices
FINRA rules provide for the equitable
allocation of reasonable dues, fees and
other charges among members and
issuers and other persons using any
facility or system that FINRA operates
or controls. FINRA believes that the
proposed rule change to waive trade
reporting fees under Rule 7710, as
described herein, is appropriate in light
of the ORF systems issue on March 24,
2015. FINRA does not believe that
members should incur fees for the
corrective action they were required to
take following the ORF systems issue.
FINRA believes that this limited waiver
results in reasonable fees and financial
benefits that are equitably allocated. The
financial benefit of the trade reporting
fee waiver is available to all firms that
reported to the ORF on March 24, 2015
and to all firms that reported trades with
an execution date or original report date
of March 24, 2015, provided that such
reports were received by March 31,
2015. The proposed rule change is
reasonable because the waiver of ORF
trade reporting fees—and the financial
benefit from such waiver—is of limited
amount, duration and application, as
noted above. Finally, the proposed trade
reporting fee waiver does not unfairly
discriminate between or among
members in that the waiver is available
to any such member that reported
transactions to the ORF on the relevant
dates.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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FINRA does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. FINRA
believes that the proposed rule change
to waive the trade reporting fees is
appropriate in light of the ORF systems
issue, which required members to take
corrective action and make additional
submissions to the ORF. FINRA believes
that the limited trade reporting fee
waiver would not place an unreasonable
fee burden on members, nor confer an
uncompetitive benefit to members that
have their trade reporting fees waived,
in that such waiver would be available
for a very limited period and the
financial impact of such a waiver would
be de minimis.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
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19:31 Apr 20, 2015
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 8 and paragraph (f)(2) of Rule
19b–4 thereunder.9 At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
FINRA–2015–007 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–FINRA–2015–007. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
8 15
9 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
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Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
offices of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–FINRA–
2015–007, and should be submitted on
or before May 12, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Brent J. Fields,
Secretary.
[FR Doc. 2015–09070 Filed 4–20–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
31552; File No. 812–14302]
Voya Retirement Insurance and
Annuity Company et al.; Notice of
Application
April 15, 2015.
Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’).
ACTION: Notice of application for an
order approving the substitution of
certain securities pursuant to section
26(c) of the Investment Company Act of
1940, as amended (the ‘‘1940 Act’’ or
‘‘Act’’).
AGENCY:
Applicants: Voya Retirement
Insurance and Annuity Company
(‘‘Voya Retirement’’), Voya Insurance
and Annuity Company (‘‘Voya
Insurance’’), ReliaStar Life Insurance
Company of New York (‘‘ReliaStar
NY’’), and Security Life of Denver
Insurance Company (‘‘Security Life’’)
(each a ‘‘Company’’ and together, the
‘‘Companies’’), Variable Annuity
Account B of Voya Retirement (‘‘Voya
Retirement B’’), Variable Annuity
Account I of Voya Retirement (‘‘Voya
Retirement I’’), Separate Account B of
Voya Insurance (‘‘Voya Insurance B’’),
Separate Account EQ of Voya Insurance
(‘‘Voya Insurance EQ’’), ReliaStar Life
Insurance Company of New York
Separate Account NY–B (‘‘ReliaStar
NY–B’’), Security Life Separate Account
A1 (‘‘Security Life A1’’), Security Life
Separate Accounts S–A1 (‘‘Security Life
S–A1’’) (each, an ‘‘Account’’ and
10 17
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together, the ‘‘Accounts’’) and Voya
Variable Portfolios, Inc. The Companies,
the Accounts, and Voya Variable
Portfolios, Inc. are collectively referred
to herein as the ‘‘Applicants.’’
SUMMARY: Summary of Application:
Applicants seek an order pursuant to
section 26(c) of the 1940 Act, approving
the substitution of shares issued by
certain series of Voya Variable
Portfolios, Inc. (the ‘‘Replacement
Funds’’) for shares of certain registered
investment companies currently held by
subaccounts of the Accounts (the
‘‘Existing Funds’’), to support certain
variable annuity contracts (collectively,
the ‘‘Contracts’’) issued by the
Companies.
Web site by searching for the file
number, or for an Applicant using the
Company name box, at https://
www.sec.gov/search/search.htm, or by
calling (202) 551–8090.
Applicants’ Representations
1. Voya Retirement is the depositor of
Voya Retirement B and Voya Retirement
I. Voya Insurance is the depositor of
Voya Insurance B and Voya Insurance
EQ. ReliaStar NY is the depositor of
ReliaStar NY–B. Security Life is the
depositor of Security Life A1 and
Security Life S–A1. Each Company is an
indirect, wholly-owned subsidiary of
Voya Financial, Inc.1
2. Each Account is a ‘‘separate
account’’ as defined by Rule 0–1(e)
DATES:
under the 1940 Act and each is
Filing Date: The application was filed
registered under the 1940 Act as a unit
on April 29, 2014, and was amended
investment trust. Each of the respective
and restated October 27, 2014, February
Accounts is used by the Company for
23, 2015 and March 31, 2015.
which it is a part to support the
Hearing or Notification of Hearing: An
Contracts that it issues. Each Account is
order granting the application will be
divided into subaccounts, each of which
issued unless the Commission orders a
invests exclusively in shares of an
hearing. Interested persons may request
Existing Fund or another registered
a hearing by writing to the Secretary of
open-end management investment
the Commission and serving the
company. The application sets forth the
Applicants with a copy of the request,
registration statement file numbers for
personally or by mail. Hearing requests
the Contracts and the Accounts.
should be received by the Commission
3. The Contracts are individual
by 5:30 p.m. on May 11, 2015 and
variable annuity contracts. Each of the
should be accompanied by proof of
prospectuses for the Contracts discloses
service on the Applicants in the form of
that the issuing Company reserves the
an affidavit or, for lawyers, a certificate
right, subject to Commission approval
of service. Pursuant to Rule 0–5 under
and compliance with applicable law, to
the Act, hearing requests should state
substitute shares of another registered
the nature of the writer’s interest, any
open-end management investment
facts bearing upon the desirability of a
company for shares of a registered openhearing on the matter, the reason for the
end management investment company
request, and the issues contested.
held by a subaccount of an Account
Persons who wish to be notified of a
whenever the Company, in its judgment,
hearing may request notification by
determines that the investment in the
writing to the Commission’s Secretary.
registered open-end management
ADDRESSES: Commission: Brent Fields,
investment company no longer suits the
Secretary, SEC, 100 F Street, NE.,
purpose of the Contract.
Washington, DC 20549–1090.
4. Voya Variable Portfolios is an openApplicants: J. Neil McMurdie, Esquire,
end management investment company
Senior Counsel, Voya Financial Legal
of the series type that is registered with
Services, One Orange Way, Windsor, CT the Commission under the 1940 Act
06095.
(File No. 811–05173).2 Shares of the
FOR FURTHER INFORMATION CONTACT:
1 Prior to September 1, 2014, Voya Retirement
Rochelle Kauffman Plesset, Senior
was known as ING Life Insurance and Annuity
Counsel, at (202) 551–6840, or Nadya
Company and Voya Insurance was known as ING
Roytblat, Assistant Chief Counsel at
USA Annuity and Life Insurance Company. Prior to
(202) 551–0825 (Division of Investment
April 7, 2014, Voya Financial, Inc. was known as
Management, Chief Counsel’s Office).
ING U.S. Inc.
2 Effective May 1, 2014 Voya Variable Portfolios
SUPPLEMENTARY INFORMATION: The
changed its name from ING Variable Portfolios, Inc.
following is a summary of the
The names of the Replacement Funds were also
application. The complete application
changed as of this date to reflect the rebranding of
the investment company.
may be obtained via the Commission’s
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series are registered under the Securities
Act of 1933 (File No. 333–05173).
5. Voya Investments LLC (‘‘Voya
Investments’’), a registered investment
adviser, has overall responsibility for
the management of each Replacement
Fund.3 Voya Investments delegates to a
sub-adviser the responsibility for day-today management of the investments of
each Replacement Fund, subject to Voya
Investment’s oversight.
6. Applicants propose, as set forth
below, to substitute shares of the
Replacement Funds for shares of the
Existing Funds (‘‘Substitutions’’):
Existing fund
ClearBridge Variable
Large Cap Value
Portfolio- Class I.
Fidelity VIP Equity-Income Portfolio- Initial Class.
Fidelity VIP Equity-Income PortfolioService 2 Class.
Invesco VI Core Equity Fund- Class I.
Invesco VI American
Franchise FundClass I.
Pioneer Equity Income VCT
Portfolio- Class II.
Replacement fund
Voya Russell Large
Cap Value Index
Portfolio- Class I.
Voya Russell Large
Cap Value Index
Portfolio- Class I.
Voya Russell Large
Cap Value Index
Portfolio- Class S.
Voya Russell Large
Cap Index
Portfolio- Class S.
Voya Russell Large
Cap Growth Index
Portfolio- Class S.
Voya Russell Large
Cap Value Index
Portfolio- Class S.
7. Applicants state that the
investment objectives and investment
policies of each Replacement Fund are
similar to the corresponding Existing
Fund, or each Replacement Fund’s
underlying portfolio construction and
investment results are similar to those of
the Existing Fund, and therefore the
fundamental objectives, risk and
performance expectations of those
Contract Owners with interests in
subaccounts of the Existing Funds will
continue to be met after the
Substitutions.
8. The investment objectives of each
Existing Fund and its corresponding
Replacement Fund are set out below.
Additional information for each Existing
Fund and Replacement Fund, including
principal investment strategies,
principal risks and comparative
performance history, can be found in
the application.
3 Effective May 1, 2014, Voya Investments
changed its name from ING Investments, LLC.
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Existing fund
Replacement fund
ClearBridge Variable Large Cap Value Portfolio seeks long-term growth
of capital as its primary investment objective. Current income is a
secondary objective.
Voya Russell Large Cap Value Index Portfolio seeks investment results
(before fees and expenses) that correspond to the total return (which
includes capital appreciation and income) of the Russell Top 200
Value Index.
Voya Russell Large Cap Value Index Portfolio seeks investment results
(before fees and expenses) that correspond to the total return (which
includes capital appreciation and income) of the Russell Top 200
Value Index.
Voya Russell Large Cap Index Portfolio seeks investment results (before fees and expenses) that correspond to the total return (which includes capital appreciation and income) of the Russell Top 200
Index.
Voya Russell Large Cap Growth Index Portfolio seeks investment results (before fees and expenses) that correspond to the total return
(which includes capital appreciation and income) of the Russell Top
200 Growth Index.
Voya Russell Large Cap Value Index Portfolio seeks investment results
(before fees and expenses) that correspond to the total return (which
includes capital appreciation and income) of the Russell Top 200
Value Index.
Fidelity VIP Equity-Income Portfolio seeks reasonable income. The
fund will also consider the potential for capital appreciation. The
fund’s goal is to achieve a yield which exceeds the composite yield
on the securities comprising the S&P 500 Index.
Invesco VI Core Equity Fund seeks long-term growth of capital ............
Invesco VI American Franchise Fund seeks capital growth. ...................
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Pioneer Equity Income VCT Portfolio seeks current income and longterm growth of capital from a portfolio consisting primarily of income
producing equity securities of U.S. corporations.
9. Applicants state that at the time of
the Substitutions the overall fees and
expenses of the Replacement Funds will
be less than those assessed by the
Existing Funds and that for two years
following the effective date of the
Substitutions (‘‘Effective Date’’), the net
annual expenses of each of the
Replacement Funds will not exceed the
net annual expenses of each
corresponding Existing Fund. The
application sets forth the fees and
expenses of each Existing Fund and its
corresponding Replacement Fund in
greater detail.
10. Applicants state that by
substituting unaffiliated funds with
funds that are advised and subadvised
by affiliates of the Companies, the
principal purposes of the Substitutions
would, among other things: (1) Help
implement the Companies’ overall
business plan to make the Contracts
more competitive (and thus more
attractive to customers) and more
efficient to administer and oversee; (2)
provide the Companies with more
influence over the administrative and
management aspects of the funds
offered through the Contracts, thereby
reducing costs and customer confusion;
(3) allow each Company the ability to
react more quickly to the changes and
problems it encounters in its oversight
of the funds which are available in its
Contracts; (4) allow the Companies to
reduce costs by consolidating the
administration of the Replacement
Funds with its other funds; and (5)
allow the Companies to respond to
expense, performance and management
matters that they have identified in their
due diligence review of the funds
available through the Contracts.
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11. Applicants represent that as of the
Effective Date shares of the Existing
Funds will be redeemed for cash. The
Companies, on behalf of each Existing
Fund subaccount of each relevant
Account, will simultaneously place a
redemption request with each Existing
Fund and a purchase order with the
corresponding Replacement Fund so
that the purchase of Replacement Fund
shares will be for the exact amount of
the redemption proceeds. Thus,
Contract values will remain fully
invested at all times. The proceeds of
such redemptions will then be used to
purchase the appropriate number of
shares of the applicable Replacement
Fund.
12. The Substitutions will take place
at relative net asset value (in accordance
with Rule 22c-1 under the 1940 Act)
with no change in the amount of any
Affected Contract Owner’s contract
value, cash value, accumulation value,
account value or death benefit or in
dollar value of his or her investment in
the applicable Accounts. No brokerage
commissions, fees or other
remuneration will be paid by either the
Existing Funds or the Replacement
Funds or by Affected Contract Owners
in connection with the Substitutions.
13. The Affected Contract Owners
will not incur any fees or charges as a
result of the Substitutions nor will their
rights or the Companies’ obligations
under the Contracts be altered in any
way. The Companies or their affiliates
will pay all expenses and transaction
costs of the Substitutions, including
legal and accounting expenses, any
applicable brokerage expenses, and
other fees and expenses. The
Substitutions will not cause the
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Contract fees and charges currently
being paid by Affected Contract Owners
to be greater after the Substitutions than
before the Substitutions. Moreover, the
Substitutions will not impose any tax
liability on Affected Contract Owners.
14. As described in the application,
after notification of the Substitution and
for 30 days after the Effective Date,
Affected Contract Owners may
reallocate the subaccount value of an
Existing Fund to any other investment
option available under their Contract
without incurring any administrative
costs or transfer charges.
15. All Affected Contract Owners
affected by the Substitutions were
notified of this application by means of
supplements to the Contract
prospectuses shortly after the date the
application was first filed with the
Commission. Among other information,
the supplements informed Affected
Contract Owners that beginning on the
date of the supplements, the Companies
will not exercise any rights reserved by
them under the Contracts to impose
restrictions or fees on transfers from an
Existing Fund (other than restrictions
related to frequent or disruptive
transfers) until at least 30 days after the
Effective Date.
16. Following the date the order
requested by this application is issued,
but at least 30 days before the Effective
Date, Affected Contract Owners will
receive a ‘‘Pre-Substitution Notice,’’
consisting of a second supplement to
the Contract prospectuses setting forth
the intended Effective Date and advising
Affected Contract Owners of their right,
if they so choose, at any time during the
period beginning 30 days before the
Effective Date through at least 30 days
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following the Effective Date, to
reallocate or withdraw accumulated
value in the Existing Fund subaccounts
under their Contracts or otherwise
terminate their interest therein in
accordance with the terms and
conditions of their Contracts. If Affected
Contract Owners reallocate account
value during this 60 day period, there
will be no charge for the reallocation of
accumulated value from the Existing
Fund subaccounts and the reallocation
will not count as a transfer when
imposing any applicable restriction or
limit under the Contract on transfers.
Additionally, all Affected Contract
Owners will be sent prospectuses of the
applicable Replacement Funds at least
30 days before the Effective Date.
17. Within five (5) business days after
the Effective Date, Affected Contract
Owners will be sent a written
confirmation, which will include
confirmation that the Substitutions were
carried out as previously notified, a
restatement of the information set forth
in the Pre-Substitution Notice and
information showing how the allocation
of the Affected Contract Owner’s
account value before and immediately
following the Substitution has changed
as a result of the Substitutions.
Legal Analysis
1. Applicants request that the
Commission issue an order pursuant to
section 26(c) of the 1940 Act approving
the Substitutions. Section 26(c) requires
the depositor of a registered unit
investment trust holding the securities
of a single issuer to obtain Commission
approval before substituting the
securities held by the trust. Section
26(c) requires the Commission to issue
such an order if the evidence establishes
that the substitution is consistent with
the protection of investors and the
purposes fairly intended by the policy
and provisions of the 1940 Act.
2. Applicants submit that the terms
and conditions of the Substitutions meet
the standards set forth in section 26(c)
and assert that the replacement of an
Existing Fund with the corresponding
Replacement Fund is consistent with
the protection of investors and the
purposes fairly intended by the policy
and provisions of the l940 Act. As
described in the application, as of the
Effective Date of the Substitution, the
overall fees and expenses of each
Replacement Fund will be less than
those of the corresponding Existing
Fund and for two years following the
Effective Date, the net annual expenses
of each Replacement Fund will not
exceed the net annual expenses of the
corresponding Existing Fund.
Applicants further asset that each
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Replacement Fund has similar
investment objectives and investment
strategies as the corresponding Existing
Fund, or each Replacement Fund’s
underlying portfolio construction and
investment results are similar to those of
the corresponding Existing Fund.
Accordingly, Applicants believe that the
fundamental investment objectives, risk
and performance expectations of the
Affected Contract Owners will continue
to be met after the Substitutions.
3. Applicants also maintain that
Affected Contract Owners will be better
served by the Substitutions. Applicants
anticipate that the substitution of an
Existing Fund with the corresponding
Replacement Fund will result in a
Contract that is administered and
managed more efficiently, and one that
is more competitive with other variable
products. The rights of Affected
Contract Owners and the obligations of
the Companies under the Contracts will
not be altered by the Substitutions.
Affected Contract Owners will not incur
any additional tax liability or any
additional fees and expenses as a result
of the Substitutions.
4. Each of the prospectuses for the
Contracts discloses that the issuing
Company reserves the right, subject to
Commission approval and compliance
with applicable law, to substitute shares
of another registered open-end
management investment company for
shares of an open-end management
investment company held by a
subaccount of an Account.
5. Applicants also assert that the
Substitutions do not entail any of the
abuses that section 26(c) was designed
to prevent. Unlike a traditional unit
investment trust where a depositor
could only substitute an investment
security in a manner which
permanently affected all the investors in
the trust, the Contracts provide each
Contract Owner with the right to
exercise his or her own judgment and
transfer account values into other
subaccounts. Moreover, the Contracts
will offer Affected Contract Owners the
opportunity to transfer amounts out of
the affected subaccounts into any of the
remaining subaccounts without cost or
other disadvantage. The Substitution,
therefore, will not result in the type of
costly forced redemptions that section
26(c) was designed to prevent.
Applicants also maintain that the
Substitutions are unlike the type of
substitutions which section 26(c) was
designed to prevent in that by
purchasing a Contract, Contract Owners
select much more than a particular
registered management open-end
investment company in which to invest
their account values. They also select
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the specific type of death benefit and
other optional benefits as well as other
rights and privileges set forth in the
Contracts that will not be changed as a
result of the Substitutions.
Applicants’ Conditions
Applicants agree that any order of the
Commission granting the requested
relief will be subject to the following
conditions:
1. The Substitutions will not be
effected unless the Companies
determine that: (a) The Contracts allow
the substitution of shares of registered
open-end investment companies in the
manner contemplated by the
application; (b) the Substitutions can be
consummated as described in the
application under applicable insurance
laws; and (c) any regulatory
requirements in each jurisdiction where
the Contracts are qualified for sale have
been complied with to the extent
necessary to complete the Substitutions.
2. The Companies or their affiliates
will pay all expenses and transaction
costs of the Substitutions, including
legal and accounting expenses, any
applicable brokerage expenses and other
fees and expenses. No fees or charges
will be assessed to the Contract Owners
to effect the Substitutions.
3. The Substitutions will be effected
at the relative net asset values of the
respective shares in conformity with
section 22(c) of the 1940 Act and Rule
22c-1 thereunder without the
imposition of any transfer or similar
charges by Applicants. The
Substitutions will be effected without
change in the amount or value of any
Contracts held by Affected Contract
Owners.
4. The Substitutions will in no way
alter the tax treatment of Affected
Contract Owners in connection with
their Contracts, and no tax liability will
arise for Affected Contract Owners as a
result of the Substitutions.
5. The rights or obligations of the
Companies under the Contracts of
Affected Contract Owners will not be
altered in any way. The Substitutions
will not adversely affect any riders
under the Contracts.
6. Affected Contract Owners will be
permitted to make at least one transfer
of Contract value from the subaccount
investing in the Existing Fund (before
the Effective Date) or the Replacement
Fund (after the Effective Date) to any
other available investment option under
the Contract without charge for a period
beginning at least 30 days before the
Effective Date through at least 30 days
following the Effective Date. Except as
described in any market timing/shortterm trading provisions of the relevant
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prospectus, the Company will not
exercise any right it may have under the
Contract to impose restrictions on
transfers between the subaccounts
under the Contracts, including
limitations on the future number of
transfers, for a period beginning at least
30 days before the Effective Date
through at least 30 days following the
Effective Date.
7. All Affected Contract Owners will
be notified, at least 30 days before the
Effective Date about: (a) The intended
substitution of Existing Funds with the
Replacement Funds; (b) the intended
Effective Date; and (c) information with
respect to transfers as set forth in
Condition 6 above. In addition, the
Companies will also deliver, at least 30
days before the Effective Date a
prospectus for each applicable
Replacement Fund.
8. Companies will deliver to each
Affected Contract Owner within five (5)
business days of the Effective Date a
written confirmation which will
include: (a) A confirmation that the
Substitutions were carried out as
previously notified; (b) a restatement of
the information set forth in the PreSubstitution Notice; and (c) before and
after account values.
9. After the Effective Date Applicants
agree not to change a Replacement
Fund’s sub-adviser without first (a)
obtaining shareholder approval of the
sub-adviser change or (b) Voya Variable
Portfolios Inc. determining that it can
continue to rely on its manager-ofmanagers exemptive order.
10. For two years following the
Effective Date the net annual expenses
of each Replacement Fund will not
exceed the net annual expenses of the
corresponding Existing Fund as of the
Fund’s most recent fiscal year. To
achieve this limitation, the Replacement
Fund’s investment adviser will waive
fees or reimburse the Replacement Fund
in certain amounts to maintain expenses
at or below the limit. Any adjustments
will be made at least on a quarterly
basis. In addition, the Companies will
not increase the Contract fees and
charges including asset based charges
such as mortality expense risk charges
deducted from the subaccounts that
would otherwise be assessed under the
terms of the Contracts for a period of at
least two years following the Effective
Date.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015–09067 Filed 4–20–15; 8:45 am]
BILLING CODE 8011–01–P
VerDate Sep<11>2014
18:07 Apr 20, 2015
Jkt 235001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74728; File No. SR–
NASDAQ–2015–013]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Approving a Proposed Rule Change To
List and Trade Shares of the
AlphaMark Actively Managed Small
Cap ETF of ETF Series Solutions
April 15, 2015.
I. Introduction
On February 17, 2015, The NASDAQ
Stock Market LLC (the ‘‘Exchange’’ or
‘‘Nasdaq’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 2 and Rule 19b–4
thereunder,3 a proposed rule change to
list and trade the shares (‘‘Shares’’) of
the AlphaMark Actively Managed Small
Cap ETF (the ‘‘Fund’’) of ETF Series
Solutions (the ‘‘Trust’’) under Nasdaq
Rule 5735. The proposed rule change
was published for comment in the
Federal Register on March 3, 2015.4 The
Commission received no comments on
the proposed rule change. This order
approves the proposed rule change.
II. Description of the Proposal
The Exchange proposes to list and
trade the Shares under Nasdaq Rule
5735, which governs the listing and
trading of Managed Fund Shares on the
Exchange. The Fund will be an activelymanaged exchange-traded fund (‘‘ETF’’).
The Shares will be offered by the Trust.5
The Trust is registered with the
Commission as an investment company
and has filed a registration statement on
Form N–1A (‘‘Registration Statement’’)
with the Commission.6 The Fund is a
series of the Trust.
AlphaMark Advisors, LLC will be the
investment adviser (‘‘Adviser’’) to the
Fund. Quasar Distributors, LLC (the
‘‘Distributor’’) will be the principal
underwriter and distributor of the
Fund’s Shares. U.S. Bancorp Fund
Services, LLC will act as the
administrator, accounting agent, and
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 74377
(February 25, 2015), 80 FR 11502 (‘‘Notice’’).
5 The Trust has obtained an order from the
Commission granting certain exemptive relief to the
Trust under the 1940 Act. See Investment Company
Act Release No. 31469 (February 24, 2015) (File No.
812–14402).
6 See Post- Effective Amendment No. 43 to the
Registration Statement on Form N–1A for the Trust,
dated February 4, 2015 (File Nos. 333–179562 and
811–22668).
2 15
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
22249
transfer agent to the Fund. U.S. Bank
National Association will act as the
custodian to the Fund. The Exchange
states that the Adviser is not a brokerdealer, and is not affiliated with any
broker-dealer.7 The Exchange has made
the following representations and
statements regarding the Fund.8
Principal Investments
The Fund’s primary investment
objective is to seek long-term growth of
capital. The Fund will pursue its
objectives by investing primarily—i.e.,
at least 80% of its assets under normal
market conditions 9—in a portfolio of
equity securities of small cap companies
listed on a U.S. exchange.
The Fund defines ‘‘equity securities’’
to include common and preferred stock,
American Depositary Receipts
(‘‘ADRs’’), real estate investment trusts,
and ETFs that under normal
circumstances invest at least 80% of
their net assets in equity securities of
small cap companies (‘‘Small Cap
ETFs’’). The Fund may invest up to 30%
of its net assets in foreign equity
securities of small cap companies traded
on a U.S. exchange as ADRs, which may
include companies in emerging markets.
The Adviser expects that there will
generally be between 25 and 40 stocks
in the Fund’s portfolio.
The Fund is non-diversified, and
therefore may invest a larger percentage
of its assets in the securities of a single
7 See Notice, supra note 4, 80 FR at 11503. In
addition, the Exchange states that, in the event (a)
the Adviser becomes affiliated with a broker-dealer
or registers as a broker-dealer, or (b) any new
adviser or sub-adviser is a registered broker-dealer
or becomes affiliated with a broker-dealer, it will
implement a fire wall with respect to its relevant
personnel and/or such broker-dealer affiliate, as
applicable, regarding access to information
concerning the composition and/or changes to the
portfolio and will be subject to procedures designed
to prevent the use and dissemination of material
nonpublic information regarding such portfolio.
According to the Exchange, the Adviser has no
present intent or arrangement to become affiliated
with any broker-dealer, and the Fund does not
currently intend to use a sub-adviser. Id.
8 Additional information regarding, among other
things, the Fund, the Shares, the Fund’s investment
objectives, the Fund’s strategies, the Fund’s
holdings, risks, fees and expenses associated with
the Shares, creations and redemptions of Shares,
availability of information, trading rules and halts,
and surveillance procedures can be found in the
Notice and the Registration Statement. See Notice,
supra note 4, and Registration Statement, supra
note 6, respectively.
9 The term ‘‘under normal market conditions’’ as
used herein includes, but is not limited to, the
absence of adverse market, economic, political or
other conditions, including extreme volatility or
trading halts in the securities markets or the
financial markets generally; operational issues
causing dissemination of inaccurate market
information; or force majeure type events such as
systems failure, natural or man-made disaster, act
of God, armed conflict, act of terrorism, riot or labor
disruption or any similar intervening circumstance.
E:\FR\FM\21APN1.SGM
21APN1
]]>Agencies
[Federal Register Volume 80, Number 76 (Tuesday, April 21, 2015)]
[Notices]
[Pages 22245-22249]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-09067]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 31552; File No. 812-14302]
Voya Retirement Insurance and Annuity Company et al.; Notice of
Application
April 15, 2015.
AGENCY: Securities and Exchange Commission (``SEC'' or ``Commission'').
ACTION: Notice of application for an order approving the substitution
of certain securities pursuant to section 26(c) of the Investment
Company Act of 1940, as amended (the ``1940 Act'' or ``Act'').
-----------------------------------------------------------------------
Applicants: Voya Retirement Insurance and Annuity Company (``Voya
Retirement''), Voya Insurance and Annuity Company (``Voya Insurance''),
ReliaStar Life Insurance Company of New York (``ReliaStar NY''), and
Security Life of Denver Insurance Company (``Security Life'') (each a
``Company'' and together, the ``Companies''), Variable Annuity Account
B of Voya Retirement (``Voya Retirement B''), Variable Annuity Account
I of Voya Retirement (``Voya Retirement I''), Separate Account B of
Voya Insurance (``Voya Insurance B''), Separate Account EQ of Voya
Insurance (``Voya Insurance EQ''), ReliaStar Life Insurance Company of
New York Separate Account NY-B (``ReliaStar NY-B''), Security Life
Separate Account A1 (``Security Life A1''), Security Life Separate
Accounts S-A1 (``Security Life S-A1'') (each, an ``Account'' and
[[Page 22246]]
together, the ``Accounts'') and Voya Variable Portfolios, Inc. The
Companies, the Accounts, and Voya Variable Portfolios, Inc. are
collectively referred to herein as the ``Applicants.''
SUMMARY: Summary of Application: Applicants seek an order pursuant to
section 26(c) of the 1940 Act, approving the substitution of shares
issued by certain series of Voya Variable Portfolios, Inc. (the
``Replacement Funds'') for shares of certain registered investment
companies currently held by subaccounts of the Accounts (the ``Existing
Funds''), to support certain variable annuity contracts (collectively,
the ``Contracts'') issued by the Companies.
DATES:
Filing Date: The application was filed on April 29, 2014, and was
amended and restated October 27, 2014, February 23, 2015 and March 31,
2015.
Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Secretary of
the Commission and serving the Applicants with a copy of the request,
personally or by mail. Hearing requests should be received by the
Commission by 5:30 p.m. on May 11, 2015 and should be accompanied by
proof of service on the Applicants in the form of an affidavit or, for
lawyers, a certificate of service. Pursuant to Rule 0-5 under the Act,
hearing requests should state the nature of the writer's interest, any
facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request notification by writing to the
Commission's Secretary.
ADDRESSES: Commission: Brent Fields, Secretary, SEC, 100 F Street, NE.,
Washington, DC 20549-1090. Applicants: J. Neil McMurdie, Esquire,
Senior Counsel, Voya Financial Legal Services, One Orange Way, Windsor,
CT 06095.
FOR FURTHER INFORMATION CONTACT: Rochelle Kauffman Plesset, Senior
Counsel, at (202) 551-6840, or Nadya Roytblat, Assistant Chief Counsel
at (202) 551-0825 (Division of Investment Management, Chief Counsel's
Office).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
Applicant using the Company name box, at https://www.sec.gov/search/search.htm, or by calling (202) 551-8090.
Applicants' Representations
1. Voya Retirement is the depositor of Voya Retirement B and Voya
Retirement I. Voya Insurance is the depositor of Voya Insurance B and
Voya Insurance EQ. ReliaStar NY is the depositor of ReliaStar NY-B.
Security Life is the depositor of Security Life A1 and Security Life S-
A1. Each Company is an indirect, wholly-owned subsidiary of Voya
Financial, Inc.\1\
---------------------------------------------------------------------------
\1\ Prior to September 1, 2014, Voya Retirement was known as ING
Life Insurance and Annuity Company and Voya Insurance was known as
ING USA Annuity and Life Insurance Company. Prior to April 7, 2014,
Voya Financial, Inc. was known as ING U.S. Inc.
---------------------------------------------------------------------------
2. Each Account is a ``separate account'' as defined by Rule 0-1(e)
under the 1940 Act and each is registered under the 1940 Act as a unit
investment trust. Each of the respective Accounts is used by the
Company for which it is a part to support the Contracts that it issues.
Each Account is divided into subaccounts, each of which invests
exclusively in shares of an Existing Fund or another registered open-
end management investment company. The application sets forth the
registration statement file numbers for the Contracts and the Accounts.
3. The Contracts are individual variable annuity contracts. Each of
the prospectuses for the Contracts discloses that the issuing Company
reserves the right, subject to Commission approval and compliance with
applicable law, to substitute shares of another registered open-end
management investment company for shares of a registered open-end
management investment company held by a subaccount of an Account
whenever the Company, in its judgment, determines that the investment
in the registered open-end management investment company no longer
suits the purpose of the Contract.
4. Voya Variable Portfolios is an open-end management investment
company of the series type that is registered with the Commission under
the 1940 Act (File No. 811-05173).\2\ Shares of the series are
registered under the Securities Act of 1933 (File No. 333-05173).
---------------------------------------------------------------------------
\2\ Effective May 1, 2014 Voya Variable Portfolios changed its
name from ING Variable Portfolios, Inc. The names of the Replacement
Funds were also changed as of this date to reflect the rebranding of
the investment company.
---------------------------------------------------------------------------
5. Voya Investments LLC (``Voya Investments''), a registered
investment adviser, has overall responsibility for the management of
each Replacement Fund.\3\ Voya Investments delegates to a sub-adviser
the responsibility for day-to-day management of the investments of each
Replacement Fund, subject to Voya Investment's oversight.
---------------------------------------------------------------------------
\3\ Effective May 1, 2014, Voya Investments changed its name
from ING Investments, LLC.
---------------------------------------------------------------------------
6. Applicants propose, as set forth below, to substitute shares of
the Replacement Funds for shares of the Existing Funds
(``Substitutions''):
------------------------------------------------------------------------
Existing fund Replacement fund
------------------------------------------------------------------------
ClearBridge Variable Large Cap Value Voya Russell Large Cap Value
Portfolio- Class I. Index Portfolio- Class I.
Fidelity VIP Equity-Income Portfolio- Voya Russell Large Cap Value
Initial Class. Index Portfolio- Class I.
Fidelity VIP Equity-Income Portfolio- Voya Russell Large Cap Value
Service 2 Class. Index Portfolio- Class S.
Invesco VI Core Equity Fund- Class I...... Voya Russell Large Cap Index
Portfolio- Class S.
Invesco VI American Franchise Fund- Class Voya Russell Large Cap
I. Growth Index Portfolio-
Class S.
Pioneer Equity Income VCT Portfolio- Class Voya Russell Large Cap Value
II. Index Portfolio- Class S.
------------------------------------------------------------------------
7. Applicants state that the investment objectives and investment
policies of each Replacement Fund are similar to the corresponding
Existing Fund, or each Replacement Fund's underlying portfolio
construction and investment results are similar to those of the
Existing Fund, and therefore the fundamental objectives, risk and
performance expectations of those Contract Owners with interests in
subaccounts of the Existing Funds will continue to be met after the
Substitutions.
8. The investment objectives of each Existing Fund and its
corresponding Replacement Fund are set out below. Additional
information for each Existing Fund and Replacement Fund, including
principal investment strategies, principal risks and comparative
performance history, can be found in the application.
[[Page 22247]]
------------------------------------------------------------------------
Existing fund Replacement fund
------------------------------------------------------------------------
ClearBridge Variable Large Cap Value Voya Russell Large Cap Value
Portfolio seeks long-term growth of Index Portfolio seeks
capital as its primary investment investment results (before
objective. Current income is a fees and expenses) that
secondary objective. correspond to the total return
(which includes capital
appreciation and income) of
the Russell Top 200 Value
Index.
Fidelity VIP Equity-Income Portfolio Voya Russell Large Cap Value
seeks reasonable income. The fund will Index Portfolio seeks
also consider the potential for investment results (before
capital appreciation. The fund's goal fees and expenses) that
is to achieve a yield which exceeds correspond to the total return
the composite yield on the securities (which includes capital
comprising the S&P 500 Index. appreciation and income) of
the Russell Top 200 Value
Index.
Invesco VI Core Equity Fund seeks long- Voya Russell Large Cap Index
term growth of capital. Portfolio seeks investment
results (before fees and
expenses) that correspond to
the total return (which
includes capital appreciation
and income) of the Russell Top
200 Index.
Invesco VI American Franchise Fund Voya Russell Large Cap Growth
seeks capital growth.. Index Portfolio seeks
investment results (before
fees and expenses) that
correspond to the total return
(which includes capital
appreciation and income) of
the Russell Top 200 Growth
Index.
Pioneer Equity Income VCT Portfolio Voya Russell Large Cap Value
seeks current income and long-term Index Portfolio seeks
growth of capital from a portfolio investment results (before
consisting primarily of income fees and expenses) that
producing equity securities of U.S. correspond to the total return
corporations. (which includes capital
appreciation and income) of
the Russell Top 200 Value
Index.
------------------------------------------------------------------------
9. Applicants state that at the time of the Substitutions the
overall fees and expenses of the Replacement Funds will be less than
those assessed by the Existing Funds and that for two years following
the effective date of the Substitutions (``Effective Date''), the net
annual expenses of each of the Replacement Funds will not exceed the
net annual expenses of each corresponding Existing Fund. The
application sets forth the fees and expenses of each Existing Fund and
its corresponding Replacement Fund in greater detail.
10. Applicants state that by substituting unaffiliated funds with
funds that are advised and subadvised by affiliates of the Companies,
the principal purposes of the Substitutions would, among other things:
(1) Help implement the Companies' overall business plan to make the
Contracts more competitive (and thus more attractive to customers) and
more efficient to administer and oversee; (2) provide the Companies
with more influence over the administrative and management aspects of
the funds offered through the Contracts, thereby reducing costs and
customer confusion; (3) allow each Company the ability to react more
quickly to the changes and problems it encounters in its oversight of
the funds which are available in its Contracts; (4) allow the Companies
to reduce costs by consolidating the administration of the Replacement
Funds with its other funds; and (5) allow the Companies to respond to
expense, performance and management matters that they have identified
in their due diligence review of the funds available through the
Contracts.
11. Applicants represent that as of the Effective Date shares of
the Existing Funds will be redeemed for cash. The Companies, on behalf
of each Existing Fund subaccount of each relevant Account, will
simultaneously place a redemption request with each Existing Fund and a
purchase order with the corresponding Replacement Fund so that the
purchase of Replacement Fund shares will be for the exact amount of the
redemption proceeds. Thus, Contract values will remain fully invested
at all times. The proceeds of such redemptions will then be used to
purchase the appropriate number of shares of the applicable Replacement
Fund.
12. The Substitutions will take place at relative net asset value
(in accordance with Rule 22c-1 under the 1940 Act) with no change in
the amount of any Affected Contract Owner's contract value, cash value,
accumulation value, account value or death benefit or in dollar value
of his or her investment in the applicable Accounts. No brokerage
commissions, fees or other remuneration will be paid by either the
Existing Funds or the Replacement Funds or by Affected Contract Owners
in connection with the Substitutions.
13. The Affected Contract Owners will not incur any fees or charges
as a result of the Substitutions nor will their rights or the
Companies' obligations under the Contracts be altered in any way. The
Companies or their affiliates will pay all expenses and transaction
costs of the Substitutions, including legal and accounting expenses,
any applicable brokerage expenses, and other fees and expenses. The
Substitutions will not cause the Contract fees and charges currently
being paid by Affected Contract Owners to be greater after the
Substitutions than before the Substitutions. Moreover, the
Substitutions will not impose any tax liability on Affected Contract
Owners.
14. As described in the application, after notification of the
Substitution and for 30 days after the Effective Date, Affected
Contract Owners may reallocate the subaccount value of an Existing Fund
to any other investment option available under their Contract without
incurring any administrative costs or transfer charges.
15. All Affected Contract Owners affected by the Substitutions were
notified of this application by means of supplements to the Contract
prospectuses shortly after the date the application was first filed
with the Commission. Among other information, the supplements informed
Affected Contract Owners that beginning on the date of the supplements,
the Companies will not exercise any rights reserved by them under the
Contracts to impose restrictions or fees on transfers from an Existing
Fund (other than restrictions related to frequent or disruptive
transfers) until at least 30 days after the Effective Date.
16. Following the date the order requested by this application is
issued, but at least 30 days before the Effective Date, Affected
Contract Owners will receive a ``Pre-Substitution Notice,'' consisting
of a second supplement to the Contract prospectuses setting forth the
intended Effective Date and advising Affected Contract Owners of their
right, if they so choose, at any time during the period beginning 30
days before the Effective Date through at least 30 days
[[Page 22248]]
following the Effective Date, to reallocate or withdraw accumulated
value in the Existing Fund subaccounts under their Contracts or
otherwise terminate their interest therein in accordance with the terms
and conditions of their Contracts. If Affected Contract Owners
reallocate account value during this 60 day period, there will be no
charge for the reallocation of accumulated value from the Existing Fund
subaccounts and the reallocation will not count as a transfer when
imposing any applicable restriction or limit under the Contract on
transfers. Additionally, all Affected Contract Owners will be sent
prospectuses of the applicable Replacement Funds at least 30 days
before the Effective Date.
17. Within five (5) business days after the Effective Date,
Affected Contract Owners will be sent a written confirmation, which
will include confirmation that the Substitutions were carried out as
previously notified, a restatement of the information set forth in the
Pre-Substitution Notice and information showing how the allocation of
the Affected Contract Owner's account value before and immediately
following the Substitution has changed as a result of the
Substitutions.
Legal Analysis
1. Applicants request that the Commission issue an order pursuant
to section 26(c) of the 1940 Act approving the Substitutions. Section
26(c) requires the depositor of a registered unit investment trust
holding the securities of a single issuer to obtain Commission approval
before substituting the securities held by the trust. Section 26(c)
requires the Commission to issue such an order if the evidence
establishes that the substitution is consistent with the protection of
investors and the purposes fairly intended by the policy and provisions
of the 1940 Act.
2. Applicants submit that the terms and conditions of the
Substitutions meet the standards set forth in section 26(c) and assert
that the replacement of an Existing Fund with the corresponding
Replacement Fund is consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the l940 Act.
As described in the application, as of the Effective Date of the
Substitution, the overall fees and expenses of each Replacement Fund
will be less than those of the corresponding Existing Fund and for two
years following the Effective Date, the net annual expenses of each
Replacement Fund will not exceed the net annual expenses of the
corresponding Existing Fund. Applicants further asset that each
Replacement Fund has similar investment objectives and investment
strategies as the corresponding Existing Fund, or each Replacement
Fund's underlying portfolio construction and investment results are
similar to those of the corresponding Existing Fund. Accordingly,
Applicants believe that the fundamental investment objectives, risk and
performance expectations of the Affected Contract Owners will continue
to be met after the Substitutions.
3. Applicants also maintain that Affected Contract Owners will be
better served by the Substitutions. Applicants anticipate that the
substitution of an Existing Fund with the corresponding Replacement
Fund will result in a Contract that is administered and managed more
efficiently, and one that is more competitive with other variable
products. The rights of Affected Contract Owners and the obligations of
the Companies under the Contracts will not be altered by the
Substitutions. Affected Contract Owners will not incur any additional
tax liability or any additional fees and expenses as a result of the
Substitutions.
4. Each of the prospectuses for the Contracts discloses that the
issuing Company reserves the right, subject to Commission approval and
compliance with applicable law, to substitute shares of another
registered open-end management investment company for shares of an
open-end management investment company held by a subaccount of an
Account.
5. Applicants also assert that the Substitutions do not entail any
of the abuses that section 26(c) was designed to prevent. Unlike a
traditional unit investment trust where a depositor could only
substitute an investment security in a manner which permanently
affected all the investors in the trust, the Contracts provide each
Contract Owner with the right to exercise his or her own judgment and
transfer account values into other subaccounts. Moreover, the Contracts
will offer Affected Contract Owners the opportunity to transfer amounts
out of the affected subaccounts into any of the remaining subaccounts
without cost or other disadvantage. The Substitution, therefore, will
not result in the type of costly forced redemptions that section 26(c)
was designed to prevent. Applicants also maintain that the
Substitutions are unlike the type of substitutions which section 26(c)
was designed to prevent in that by purchasing a Contract, Contract
Owners select much more than a particular registered management open-
end investment company in which to invest their account values. They
also select the specific type of death benefit and other optional
benefits as well as other rights and privileges set forth in the
Contracts that will not be changed as a result of the Substitutions.
Applicants' Conditions
Applicants agree that any order of the Commission granting the
requested relief will be subject to the following conditions:
1. The Substitutions will not be effected unless the Companies
determine that: (a) The Contracts allow the substitution of shares of
registered open-end investment companies in the manner contemplated by
the application; (b) the Substitutions can be consummated as described
in the application under applicable insurance laws; and (c) any
regulatory requirements in each jurisdiction where the Contracts are
qualified for sale have been complied with to the extent necessary to
complete the Substitutions.
2. The Companies or their affiliates will pay all expenses and
transaction costs of the Substitutions, including legal and accounting
expenses, any applicable brokerage expenses and other fees and
expenses. No fees or charges will be assessed to the Contract Owners to
effect the Substitutions.
3. The Substitutions will be effected at the relative net asset
values of the respective shares in conformity with section 22(c) of the
1940 Act and Rule 22c-1 thereunder without the imposition of any
transfer or similar charges by Applicants. The Substitutions will be
effected without change in the amount or value of any Contracts held by
Affected Contract Owners.
4. The Substitutions will in no way alter the tax treatment of
Affected Contract Owners in connection with their Contracts, and no tax
liability will arise for Affected Contract Owners as a result of the
Substitutions.
5. The rights or obligations of the Companies under the Contracts
of Affected Contract Owners will not be altered in any way. The
Substitutions will not adversely affect any riders under the Contracts.
6. Affected Contract Owners will be permitted to make at least one
transfer of Contract value from the subaccount investing in the
Existing Fund (before the Effective Date) or the Replacement Fund
(after the Effective Date) to any other available investment option
under the Contract without charge for a period beginning at least 30
days before the Effective Date through at least 30 days following the
Effective Date. Except as described in any market timing/short-term
trading provisions of the relevant
[[Page 22249]]
prospectus, the Company will not exercise any right it may have under
the Contract to impose restrictions on transfers between the
subaccounts under the Contracts, including limitations on the future
number of transfers, for a period beginning at least 30 days before the
Effective Date through at least 30 days following the Effective Date.
7. All Affected Contract Owners will be notified, at least 30 days
before the Effective Date about: (a) The intended substitution of
Existing Funds with the Replacement Funds; (b) the intended Effective
Date; and (c) information with respect to transfers as set forth in
Condition 6 above. In addition, the Companies will also deliver, at
least 30 days before the Effective Date a prospectus for each
applicable Replacement Fund.
8. Companies will deliver to each Affected Contract Owner within
five (5) business days of the Effective Date a written confirmation
which will include: (a) A confirmation that the Substitutions were
carried out as previously notified; (b) a restatement of the
information set forth in the Pre-Substitution Notice; and (c) before
and after account values.
9. After the Effective Date Applicants agree not to change a
Replacement Fund's sub-adviser without first (a) obtaining shareholder
approval of the sub-adviser change or (b) Voya Variable Portfolios Inc.
determining that it can continue to rely on its manager-of-managers
exemptive order.
10. For two years following the Effective Date the net annual
expenses of each Replacement Fund will not exceed the net annual
expenses of the corresponding Existing Fund as of the Fund's most
recent fiscal year. To achieve this limitation, the Replacement Fund's
investment adviser will waive fees or reimburse the Replacement Fund in
certain amounts to maintain expenses at or below the limit. Any
adjustments will be made at least on a quarterly basis. In addition,
the Companies will not increase the Contract fees and charges including
asset based charges such as mortality expense risk charges deducted
from the subaccounts that would otherwise be assessed under the terms
of the Contracts for a period of at least two years following the
Effective Date.
For the Commission, by the Division of Investment Management,
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-09067 Filed 4-20-15; 8:45 am]
BILLING CODE 8011-01-P
